Chinese Province Implements New Electricity Policy for Virtual Currency Mining
A new electricity policy has been introduced for virtual currency miners in the Inner Mongolia region of China. The announcement was contained in a publication by the Department of Industry and Information Technology of the Development and Reform Commission of Inner Mongolia Autonomous Region. The new policy includes some exclusive and stringent rules under which virtual currency miners must operate going forward.
The conditions outlined in the publication are subject to immediate implementation. Full compliance is expected from virtual currency miners, with appropriate punishments spelled out for defaulters. According to the publication, the new guidelines aim to regulate virtual currency mining activities and also to further promote energy conservation and emission reduction.
Based on Inner Mongolia’s new policies, virtual currency miners shall be excluded from the public electricity billing system. A special billing arrangement has been provided with a different tariff for any individual or group engaging in virtual currency mining activities. From the date of publication of this new policy, the electricity tariff for virtual currency miners has been upgraded to 1 yuan per kilowatt.
The power grid company of Inner Mongolia has been charged to ensure that this new tariff is implemented with immediate effect. The agency has also been mandated to ensure full compliance with what is described as a differential electricity price policy.
The regional authorities of Inner Mongolia have also prohibited virtual currency “mining” projects from participating in electricity market transactions. The responsible agencies have also been tasked with the responsibility of strengthening the supervision of the electricity market order. They have also been mandated to ensure proper screening of corporate users participating in the electricity market.
The essence of this increased supervision is to ensure that no virtual currency miner takes part in electricity market transactions. The government understands that some of the virtual currency miners might attempt to disguise themselves and join the rest of the public to avoid the exclusive conditions. This is why the respective agencies have been given a special mandate to carry out proper oversight functions. Any virtual currency mining that has participated in the electricity market in the past has its licenses terminated with immediate effect.
The latest policy forbids any virtual currency mining company from connecting to the public grid with a lower electricity tariff without authorization. According to the relevant provisions of the “Power Supply Business Rules”, anyone found guilty of illegal connection to the public grid will be charged for power supplied without prior notice. This simply means that once the supervisory agency discovers that unauthorized equipment is connected to the public grid, the defaulter is immediately charged to pay.
Any individual found guilty of defaulting in the new policy will be charged the balance of the expected fee from the date of connection. In addition, the charged balance will be doubled as a penalty for going against the rules. If the authorities cannot determine the actual date of illegal connection, a period of three months shall be used to calculate the penalty.
This new policy is part of the ongoing clampdown of cryptocurrency activities in China. Recall that Inner Mongolia was one of the mining hotbeds and a hotspot at the peak of the crypto ban in 2021. There have been several reports of people still involved in the secret mining of virtual currencies in China.
Policies like this are expected to continue, just that we cannot tell for how long it will go on, neither can we tell whether the cryptocurrency ban in China will remain for a long time or reverse in the future.